(Reuters) -Pinterest beat estimates for third-quarter revenue and profit on Monday, as a stabilizing digital advertising market helped draw marketers to the image-sharing platform, sending its shares up 13% in aftermarket trading.
The company expects adjusted core earnings margin of about 600 basis points for 2023 compared with its prior expectation of about 400 basis points, Pinterest CFO Julia Donnelly said on an earnings call.
The results fan optimism about a market rebound after major industry players Alphabet, Meta Platforms and Snap all surpassed quarterly revenue expectations last week on the back of a pick up in their advertising business.
They also suggest that a push to drive up shopping on the Pinterest app through partnerships with the likes of Amazon.com was paying off for the company that lets users create online pinboards.
“Pinterest has a number of company-specific efforts underway, including improving the efficacy of its ads when it comes to conversion, that’s enabling it to outperform right now,” DA Davidson analyst Tom Forte said.
Brokerages including Bernstein have been optimistic about the benefits from the partnership, saying it could drive up Pinterest’s fourth-quarter revenue. The San-Francisco, California-based company’s revenue rose 11.5% to $763.2 million for the quarter ended Sept. 30, compared with Wall Street estimates of $743.5 million, according to LSEG data.
Global monthly active users (MAUs) on the image-sharing platform rose 8% to 482 million.
Excluding items, Pinterest earned a profit of 28 cents per share, compared with analysts’ estimates of 20 cents a share.
The company expects current-quarter revenue to grow in the 11-13% range year-over-year, compared with estimates of revenue growth of 11.3%.
CEO Bill Ready said Pinterest faced “minor short-term impact” due to the Middle East conflict as some brands paused advertising spend temporarily.
“But we’ve since seen those advertisers largely return.”
Last month, media research and investment firm Magna raised its forecast for U.S. ad spending growth to 5.2% from 4.2%, for calendar 2023. It expects digital ad sales to rise 9.6% in the period.
(Reporting by Jaspreet Singh in Bengaluru; Editing by Shailesh Kuber)
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Source: The Print
